Intel Corporation (NASDAQ: INTC) stock lost over 10.5% in the pre-market session of October 23rd, 2020 (Source: Google finance) after the company posted lower than expected results for the third quarter of FY 20. The company had expanded the capacity by more than 25% in 2020 and currently has three high-volume fabs producing 10-nanometer products to meet the customer demands. Earlier this quarter, the company has also entered into accelerated share repurchase agreements to repurchase $10 billion in stock. After this repurchase, the company will be completing approximately $17.6 billion of the $20 billion repurchase commitment that it made in October of 2019. In Q3, the company had generated $8.2 billion in operating cash flow and invested $3.7 billion in capex, resulting in $4.5 billion of free cash flow.
During the third quarter of FY 20, the company launched the 11th Gen Intel Core processors with Intel Iris Xe graphics codename Tiger Lake. This is the world’s best processor for thin and light notebooks. In real-world workloads versus competitive products, Tiger Lake delivers up to 2.7 times faster content creation, 20% faster office productivity and more than two times faster gaming, plus streaming. Further, the company has made great strides in graphics, and the company is now scaling the graphics architecture from integrated to discrete levels of performance. The first discrete GPU, DG1, is shipping now and will be in systems for multiple OEMs later in Q4. The company has also powered on the next-generation GPU for client, DG2.
INTC in the third quarter of FY 20 has reported the adjusted earnings per share of $1.11, beating the analysts’ estimates for the adjusted earnings per share of $1.10. The company had reported 4.47 percent fall in the adjusted revenue to $18.3 billion in the third quarter of FY 20, beating the analysts’ estimates for revenue of $18.22 billion. Data-centric revenue was $8.5 billion, down 10% year over year due to COVID-related weakness in the DCG, enterprise and government segment, in IOTG and NSG.
PC-centric revenue was up 1% year over year to $9.8 billion, on strong notebook PC demand in consumer and education segments and on increased supply. The company posted gross margin for the quarter of 55%, 2 points below expectations, due to lower data center ASPs driven by mix shift from enterprise and government to cloud and lower PC client ASPs on increased demand for consumer and education PCs. The company delivered the operating margin was 29%, down 1 point versus the expectations.